Both Bernie and Hillary fail Economics 101
Published 11:15 pm Wednesday, February 17, 2016
Democrats Bernie Sanders and Hillary Clinton have articulated interesting economic agendas that “professional” debate moderators either can’t or choose not to pursue in depth in their forums.
Perhaps this modest column can assist them.
Democratic Socialist Sanders insists on raising the minimum wage to a “livable” wage. Either he misunderstands the nature of entry-level, low-paying jobs or he truly believes a fast food retailer will keep as many part-time workers at $15 an hour as $8 an hour.
The largest percentage of minimum wage earners negatively affected by mandated increases are urban African-American teen males and suburban white teen females.
When the federal government raised the minimum wage $0.70 per hour in 2009, unemployment among black teens rose from 39 to 50 percent.
As the minimum wage rose by 41 percent between 2007 and 2009 — it had a disastrous effect on all teenagers. The jobless rate for 16-19 year olds increased by ten percentage points, from about 16 percent in 2007 to more than 26 percent in 2009.
Whether the worker is a teenager or adult, Department of Labor tables prove arbitrarily raising the minimum wage by government fiat alters the hourly wage for too many of these workers from their current hourly wage to zero.
Most constituents don’t know this, or they would reject such political dishonesty. They believe the politician who says he or she is going to force the mean, greedy employer to pay them more. Hooray for socialism.
Hillary is also willing to throw a good number of struggling minimum wage earners to the streets with a mandatory $12 an hour minimum wage.
If you’re reading this at your entry-level minimum wage job right now, look around at your co-workers. If they’re working hard while you’re reading, they might not be the ones who get kicked out the back door should Hillary or Bernie win the election.
Hillary promises to rebuild America’s infrastructure. So has every other politician, including Obama. The question that needs to be answered is who is competent enough to actually get it done?
President Obama promised billions to rebuild infrastructure. About 3 percent of your “stimulus” tax dollars went to such projects.
The American Society of Civil Engineers gives American infrastructure under Obama a D+ rating.
Hillary and Bernie boast spending tax dollars on “green” energy will create jobs and boost the economy.
President Obama has wasted billions of dollars on such crony government schemes, enriching CEO’s and putting workers on the streets with such alacrity that the Government Accountability Office advised shutting down the Department of Energy’s Advanced Technology Vehicle Manufacturing loan program.
That doesn’t even cover Solyndra ($529 million wasted), Abound Solar (at least $70 million wasted), or the dozens more that have put you and your neighbors in the hole for more money than Donald Trump could ever mooch from Carl Icahn.
Still, there’s obviously enough political capital in this dysfunctional message to attract significant numbers of Democratic voters.
Hillary says she would like to cut the red tape that hinders small businesses. If she is elected with a majority of Republicans in the House and Senate she might actually get that done.
Unless, of course, she isn’t being sincere. That’s a problem for Hillary. Most people don’t trust her because they know her.
Bernie believes reinstituting the Glass-Steagall Act will move banks to make more low-interest loans to small businesses. Why? Bernie says, “Local banks increasingly began to invest in risky Wall Street trading and speculation and became less inclined to make low-interest loans to small businesses.”
Notice he says nothing about mitigating inherent risks in small business loans.
Neither Hillary nor Bernie have suggested lower taxes for small businesses. Forget about encouraging corporations hoarding $2 trillion overseas to bring that money home.
Bernie especially cannot. He has proposed spending about $18 trillion over ten years on goodies for his voters, including free college, free health care, and federally-enforced paid family leave.
At the time of this writing, he has only proposed $6.5 trillion in new taxes on the rich over ten years to pay for this.
Look out, middle class!
Rick Jensen is Delaware’s award-winning conservative talk show host on WDEL.